A Nocturnal Upon St. Lucy’s Day – John Donne

‘Tis the year’s midnight, and it is the day’s,
Lucy’s, who scarce seven hours herself unmasks ;
The sun is spent, and now his flasks
Send forth light squibs, no constant rays ;
The world’s whole sap is sunk ;
The general balm th’ hydroptic earth hath drunk,
Whither, as to the bed’s-feet, life is shrunk,
Dead and interr’d ; yet all these seem to laugh,
Compared with me, who am their epitaph.

Study me then, you who shall lovers be
At the next world, that is, at the next spring ;
For I am every dead thing,
In whom Love wrought new alchemy.
For his art did express
A quintessence even from nothingness,
From dull privations, and lean emptiness ;
He ruin’d me, and I am re-begot
Of absence, darkness, death—things which are not.

All others, from all things, draw all that’s good,
Life, soul, form, spirit, whence they being have ;
I, by Love’s limbec, am the grave
Of all, that’s nothing. Oft a flood
Have we two wept, and so
Drown’d the whole world, us two ; oft did we grow,
To be two chaoses, when we did show
Care to aught else ; and often absences
Withdrew our souls, and made us carcasses.

But I am by her death—which word wrongs her—
Of the first nothing the elixir grown ;
Were I a man, that I were one
I needs must know ; I should prefer,
If I were any beast,
Some ends, some means ; yea plants, yea stones detest,
And love ; all, all some properties invest.
If I an ordinary nothing were,
As shadow, a light, and body must be here.

But I am none ; nor will my sun renew.
You lovers, for whose sake the lesser sun
At this time to the Goat is run
To fetch new lust, and give it you,
Enjoy your summer all,
Since she enjoys her long night’s festival.
Let me prepare towards her, and let me call
This hour her vigil, and her eve, since this
Both the year’s and the day’s deep midnight is.

UPDATE: Final rewrite to make this a little more scholarly.

Continue reading “A Nocturnal Upon St. Lucy’s Day – John Donne”

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Too Big to Fail and Risk Compentsation

If you have anti-lock brakes, it is claimed that you will drive crazier than if you don’t. If you drive past a bicyclist wearing safety gear, you’ll give them less clearance than one who isn’t. In short, the existence of factors that mitigate risk tends to lead, not to reduced risk, but rather to increased risk-taking.*

Thus, the real problem with Goldman Sachs and other behemoths of world finance is not exactly that they make too much money – it’s that they believe, at least to some degree, that they and other huge financial institutions are too big to fail. They’ve got government-supplied anti-lock brakes, so to speak. The combination of huge potential profits and the belief that the government will step in to save them should anything go seriously wrong leads to risk compensation of the worst kind.

This is not theory in the case of Goldman – they knew, if anyone in the world did, that once the housing bubble burst (and they had billions riding on it bursting!) that AIG would fail (AIG had billions of exposure to a housing collapse, much of it to Goldman). So, had they not believed that AIG was too big to fail, the prudent business step, starting in about 2003 or so, would have been to refrain from buying credit default insurance on instruments (mortgage bundles) that they knew could not be paid off (AIG’s exposure dwarfed the actual value of these instruments in the market).

What did they do? They loaded up on credit default insurance, above and beyond any ‘insurance’ needs – Goldman didn’t even own the instruments they were buying insurance on! In other words, they made a huge investment in the collapse of the economy – an economic titan put itself in the position of winning if and only if everybody else loses, because they were firmly convinced that the bubble would burst. At the same time, they kept selling mortgaged backed securities to their investors, despite having invested billions that would pay off ONLY if the instruments they were simultaneously selling to their customers failed.

Got that?

The only risk in all this, apart from having angry mobs start stringing them up by their reversible Adam Smith/Karl Marx neckties, was that AIG would fail – which it would have within hours of the initial claims against its credit default insurance had the government not stepped in. A government, as it happens, with dozens of former (and future) Goldman Sachs employees in key positions. Quickly, the argument was made that AIG was simply too big to fail. The Fed effectively nationalized AIG at the cost of $85B – and Goldman’s ‘investment’ was paid off in full.

Note, at the same exact time Goldman was receiving 100% payout on its investments, the people to whom it had sold the exact same instruments whose failure triggered those billions of dollars were trying to sue Goldman for conflict of interest – and being told ‘hey, you’re big boys and girls – you should have known the risks. Don’t go crying to me.’ And the courts, so far, are backing them up.

The top goal for any meaningful financial reform should be the elimination of Too Big to Fail. Government bailouts of private industry should be strictly illegal. Any company that reaches a size where its failure would seriously damage the US economy should be considered by that fact alone subject to anti-trust break-up. The counter-arguments (usually from economic efficiency of some sort) simply wilt in comparison to the reality that our entire government and the tax-paying capacity of our children’s children has been put into the service of one extremely well connected bank.

* note: risk compensation takes place across populations, meaning that it’s not automatic that any one individual will fall prey to it. *I* don’t drive more recklessly because my car is safer! No, really!

Dr. Kelly and Small Meaninglessness

That NYT essay by Dr. Kelly, chair of Harvard’s Philosophy dept, keeps percolating up in my mind. I’ll take a crack at deciphering it over the next few days, time permitting. Sure, he’s writing for a popular audience, so he’s not going to get all technical, but at least we can hope for some level of clarity from somebody with a job as a professional thinker. Since he can’t very well plead ignorance, we must honor him by assuming he means what says and isn’t just confused. Until proven otherwise. So:

The discussion of nihilism ─ the sense that it is no longer obvious what our most fundamental commitments are, or what matters in a life of distinction and worth, the sense that the world is an abyss of meaning rather than its God-given preserve ─ finds no sustained treatment in the works that Nietzsche prepared for publication during his lifetime.

Rather than being a positive assertion – life is meaningless – Nihilism, in the hands of Kelly becomes, first, “a sense that it is no longer obvious what our most fundamental commitments are”.  So, right off the bat, we’re sensing instead of thinking. Then, “the sense that the world is an abyss of meaning rather than its God-given preserve”. Hmm.  I had sensed a certain terrible nobility in Nihilism, a certain motivating despair. Kelly’s nihilism seems more likely to make one pine and sigh than to curse the world, shake a fist at Destiny and remake the moral and social landscape by sheer force of Will. Or kill yourself, one or the other. I’ve sensed better of nihilism than Kelly senses. Continue reading “Dr. Kelly and Small Meaninglessness”

Happy, Holy and Blessed Feast Day That I Used to Not Understand At All!

Throughout the liturgical year, the Church presents us with mysteries for our enlightenment. The Immaculate Conception is one of a handful of Church teachings that, frankly, made no sense to me. (Humanae Vitae being another, one that I now see as spectacularly, dazzlingly right.  Maybe there’s something to this whole humble obedience thing…) I got over it.

Unlike other faiths, which seem to me to come up with mysteries ad hoc – for example, Sola Scriptura + ignore a bunch of explicit Scriptural stuff + add a whole laundry list of mandatory beliefs that are found only obliquely in Scripture, if at all – the Church’s mysteries seem well expressed, few and central. Salvation through the sacrifice of Jesus. The True Presence. The Communion of Saints.  You know? These are mysteries that  you can come back to again and again, think about, pray over, and never get to the end of while gaining a deeper and deeper understanding of reality and God’s Presence.

So, the Immaculate Conception used to baffle me – how does this mystery help us to understand God any better? That seems like a really dumb question, but I felt that way for years. So, in honor of our Blessed Mother, conceived, born and for ever Immaculate, let us pray this day for perfect humility and greater understanding.

Gotta run – taking the kids to Mass tonight.

Extending the ‘Tax Cuts’ – Bringing it All Home

OK, so I’ve blithered about the concepts surrounding ‘soak the rich’ and how futzing about with income tax rates doesn’t mean much to people who already have huge wealth. But what about this current round of tax manipulations?

Here is a description of what we’re talking about. Just look at the tables towards the bottom. Mostly, and ignoring the exact percentages,  this sort of structure looks about right to me – everybody (in theory) who makes any money has to pay *some* income tax – it’s important conceptually that *everybody* who isn’t totally destitute is a tax payer, at least nominally, as a small step toward countering the ‘them versus us’ of politics.

Now, for  specific examples – plain vanilla, net taxable income: Continue reading “Extending the ‘Tax Cuts’ – Bringing it All Home”

NYT: Overthinking as a Means to the End of Missing the Obvious

This little essay by Sean D. Kelly, chair of the department of philosophy at Harvard University, ponders a post-God-is-dead world full of little meanings that manages to dodge the bullets of  ‘purposelessness and angst’, which are, apparently, the only problems faced by a post-God-aware person – you know, an enlightened Modern:

The new possibility that Melville hoped for, therefore, is a life that steers happily between two dangers:  the monotheistic aspiration to universal validity, which leads to a culture of fanaticism and self-deceit, and the atheistic descent into nihilism, which leads to a culture of purposelessness and angst.  To give a name to Melville’s new possibility — a name with an appropriately rich range of historical resonances — we could call it polytheism.  Continue reading “NYT: Overthinking as a Means to the End of Missing the Obvious”

The Widow’s Mite: Absolute versus Relative Wealth

But, you might say, don’t the rich pay a huge proportion of all taxes?

In absolute dollar value, yes. In the example a couple posts back, I mentioned that a billionaire who took $10M in income might in fact pay $4M in taxes. Rich people taking taxable income and even paying taxes on it does in fact happen all the time.  You own a huge company, you’re Chairman of the Board, you get paid. And, gosh darn it, you even pay taxes on it! So, heck yea, those high income tax rates are just EVIL!

(Note:  in the grand tradition of the Dismal Science, in which any number of patently false simplifications are posited as essential to the theory, in what follows I’m ignoring personal psychology. Clearly, there are poor people with no appreciation for the value of money, and rich people who obsess over amounts that reflect .0001% of a .01% change in the value of the stock they own. But we’ll employ the ‘if people were remotely rational about money’ fiction here.)

Except those taxes are not *material* to the rich in the same way your or my taxes are to us. For minimum wage earner, $20 is a lot of money. To well compensated wage earners, it might take $1k, or even $10k for a high-end professional actor or athlete to register as ‘a lot of money’. For someone who own a billion dollars, $4M represents 0.4% of his net worth. For someone worth $100K, an equivalent amount would be $400, the price of a nice new guitar or a weekend at a lower-end B&B. So when you or I have to pay, say, $10K in income taxes, that’s a whole ‘nother world from what the rich experience when they decide they’ll go ahead a take some taxable income.

The point here remains the same: ‘Soaking the Rich’ just means raising income taxes on well compensated wage earners, a term that in practice means ‘people who make noticeably more than I make’. The truly rich are not affected by such plans; if they were, they possess the means of changing things so that they’re not.